What You’ll Get Out Of Today’s Show
- The third episode in our case study series featuring Brandi Sellers discussing how to be financially resilient and move forward when your job requires you to be there in person. She is a social media manager and birth and postpartum doula while her husband, John, is a concert musician.
- Unable to meet clients in the hospital, she has switched to providing virtual support through Zoom, FaceTime, and Skype, is offering add-on services, and shifting her marketing to let potential clients know doulas can still offer support during this pandemic. Instead of traveling to perform in concert, her husband has shifted to projects that can be performed virtually like scoring work.
- Pre-COVID, Brandi and her husband had a widely variable monthly income. During COVID, their monthly income is still variable and somewhat lower but they consistently earn at least $5,000 month.
- She is paying $279 a month on car insurance for one car and has not shopped around for a better rate for years. Reducing that bill by $100-$150 a month is possible.
- Her cell phone plan is costing $180 a month for 3 lines, but she could get that down to as low as $60, saving over a thousand dollars per year.
- Between paying off her credit card and cutting other recurring bills and subscriptions, she can likely save $600 month by taking one action step a week.
- It’s possible to reduce her monthly expenses by as much as 30% if she redoubles her effort and uses every available dollar to pay off debts such as the credit card, student loan, and car.
- Johnathan’s action steps
- Know how much your life actually costs
- Know what your recurring monthly structural expenses are
- Once the debt is paid off, Brandi’s core expenses are roughly $3,500 a month or $42,000 a year. To reach financial independence, she will need 25 times that amount, or $1,050,000.
- Under the 4% rule of thumb, she can withdraw 4% from her savings annually and reliably expect that money will last many decades.
- Every $100 she cuts from her monthly expenses reduces her financial independence number by $30,000.
- Her budget is already optimized in other ways, but with intentionality and taking action, she should be able to further reduce monthly expenses, free up another $1,000 of cash flow, and reach financial independence in as few as 12 years.
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Resources Mentioned In Today’s Conversation